Archives for posts with tag: Ludwig von Mises

Noam Chomsky tells us that the essence of anarchism is

to seek out and identify structures of authority, hierarchy, and domination in every aspect of life, and to challenge them; unless a justification for them can be given, they are illegitimate, and should be dismantled, to increase the scope of human freedom. That includes political power, ownership and management, relations among men and women, parents and children, our control over the fate of future generations…and much else. Naturally this means a challenge to the huge institutions of coercion and control: the state, the unaccountable private tyrannies that control most of the domestic and international economy, and so on. (Chomsky on Anarchism: Anarchism, Marxism and Hope for the Future, 178)

So anarchy is fundamentally a perpetual questioning of authority and power; it asks us to consider the legitimacy of all power. In fact, James C Scott begins his history of anarchism in upland Southeast Asia by pointing out that we have to study the state by also studying statelessness or anarchy:

The huge literature on state-making, contemporary and historic, pays virtually no attention to its obverse: the history of deliberate and reactive statelessness. This is the history of those who got away, and state-making cannot be understood apart from it. This is also what makes this an anarchist history. (The Art of Not Being Governed, x)

To me, the comments from Chomsky and Scott imply an important question, one that I am not sure of the answer, although I hope to find it out some day. The question is this: what exactly is this “power” that anarchists are deliberately trying to run away from?

The question is simply this: what is power? The answer is not obvious. Trying to answer this question is the purpose of my following series of articles. I have decided to use G. William Domhoff’s collection of articles as a springboard for my exploration into the question of “what is power?”

In this article, I am going to use Domhoff’s article called Who Rules America: Alternative Theoretical Views as my starting point of inquiry. I will limit this article to a discussion of pluralism.

Domhoff, who is in the Sociology Department at the University of California at Santa Cruz, begins his discussion of pluralism, one of many rival theories of power, with this rather ominous sentence:

Pluralism is the theory that most closely corresponds to claims made in high school textbooks and the mass media, and to what many Americans believe. (bold emphasis mine)

In other words the pluralist theory seems to be very popular. My gut feeling is that if something is popular, then it is probably wrong. According to Mark Twain, this is a time to reflect:

Now I will summarize Domhoff’s discussion of the nature of pluralism (and neo-pluralism–which is the revised version of pluralism). I hope that you will start to wonder why this is the popular theory of power in the United States, because I certainly did.

  1. There are no hierarchies (so anarchism is useless, because anarchy is about abolishing hierarchical relationships in society). There is no dominant class. Power is disbursed among several groups. Power seems to be situational because different groups have power on different issues.
  2. Pluralism “mirrors” the free market economy. Everything “works” in society because of competition. Just as markets have competition in order to provide “consumer sovereignty,” so too the political arena has competition in order to provide “voter sovereignty.”
  3. The government is seen as a neutral dispute resolution body that will arbitrate among the competing interests in the society. The government is a fair and impartial judge.
  4. Power comes from the bottom up or the grassroots. The people rule! Democratic capitalism is a collection of voluntary groups that attempt to influence public opinion.
  5. These groups can become “institutionalized” into what are called “interest groups.” These interest groups can form coalitions or alliances depending on the situation.
  6. Corporate power is a non-issue. Corporate leaders are too divided among themselves to dominate government.
  7. The basic pluralist assumption about human nature is that people are self-maximizing individuals. In other words, capitalism is in, egalitarianism is out.
  8. When it comes to property rights, pluralism sounds exactly like right wing libertarianism: “The state may be brought in to institutionalize property rights, or it may be viewed as a dangerous threat to them; but the state is not a part of the creation of private property” (bold emphasis mine). It reminds me of all these online discussions from right wing libertarians trying to explain the “non-state” origins of property: such as homesteading or self-ownership.
  9. Major foundation funding of new citizen interest groups is downplayed as a source of nefarious influence by money on these citizen groups. In other words, the independence of these citizen groups has not been compromised even though they are getting a lot of money from corporate foundations.
  10. Evidence supporting the pluralist view is found in the correlation between public opinion and legislative outcome.

My Comments on Pluralism’s Theory of Power:

My initial reaction is that pluralism seems to be a theory of power created by people in power in order to justify their existing power. Domhoff stresses the fact that pluralism likes to dance around and minimize the corporate power issue. In his list of arguments against pluralism, the one that jumps out at me is this one:

At that point it seemed to a growing number of social scientists that corporations did have predominant power and that the government was not responsive to the interests of the general public. (bold emphasis mine)

Domhoff’s argument reminds me of Chomsky’s argument, about how maximizing corporate power results in the minimization of popular power:

Of course, when you minimize the state, you maximize something else–and it isn’t popular control. What gets maximized is private power, domestic and foreign. (How the World Works, 262).

There is also a similarity between Domhoff’s view that public opinion in America is all fake, the product of corporate programming, and Chomsky’s views on manufacturing consent. Domhoff argues, when discussing how public opinion is actually corporate opinion, “the corporate community spends enormous sums of money to influence public opinion through an opinion-shaping network.” Similarly, Chomsky in his book How the World Works says that “one factor is the power of business propaganda in the US, which has succeeded, to an unusual extent, in breaking down the relations among people and their sense of support for one another” (301). Both authors attack the public relations industry for shaping public opinion.

I think what the pluralist theory is trying to accomplish is to argue that power is dispersed throughout the society. Nobody has a little group or class in charge. The people or the masses are in charge through the competitive process of voting. The government–this neutral tool of the people–then works out all the conflicts between groups in society.

I think the fundamental problem with this theory of power is that it ignores the problem of inequality. It is very difficult to speak of a voluntary society when some groups have lots of wealth while other groups have very little wealth. Domhoff stresses the fact that pluralism is based on a justification of inequality: “there are great inequalities in power and wealth, but they are disbursed among several groups.” It is this defense of radical inequality that makes the pluralist system break down, in my opinion.

The next article, Part 2 in this series, will continue with Domhoff’s paper by discussing the State Autonomy Theory of Power.












Can you guess which Austrian school economist said these immortal words? Can you guess which Austrian school of economics book I am citing from when I type:

Their book takes, in the traditional style of historical apologetics, a completely deductive a priori approach.

Was it Ludwig von Mises? It might be. Take a look at one of Mises’s adversaries, the blogger Lord Keynes. Lord Keynes summarizes the Misesian methodological approach by writing in Mises’ Praxeology: A Critique:

Its [i.e., praxeological] statements and propositions are not derived from experience. They are, like those of logic and mathematics, a priori. They are not subject to verification or falsification on the ground of experience and fact.

Maybe it comes from Mises’s book on method, The Ultimate Foundation of Economic Science where we are told that

economics is not history. Economics is a branch of praxeology, the aprioristic theory of human action. The economist does not base his theories upon historical research, but upon theoretical thinking like that of the logician or the mathematician. (66)

Or could it be one of Mises’s followers, perhaps? How about we try Hoppe who tells us Democracy: The God that Failed that

A priori theory trumps and corrects experience (and logic overrules observation), and not vice-versa. (xvi)

Or maybe it is tucked away in the Introduction to the Second Edition of Man, Economy, and State with Power and Market in a section that says something like this:

This explains why Rothbard identified the use of the praxeological method, rather than a loose subjectivist orientation, as the hallmark and acid test of scientific economics. (xxxiii)

Nope! It isn’t Mises, nor is it Hoppe, nor is it Rothbard. It is none of them. In fact, I didn’t cite an Austrian school economist at all! No, my opening quotation comes from Chapter 10 of The Christian Delusion: Why Faith Fails, written by Robert M Price. His article has nothing to do with Austrian School economics; instead, it is a review essay of a “landmark work of Gospel apologetics” called The Jesus Legend: A Case for the Historical Reliability of the Synoptic Jesus Tradition. Price is a Jesus Seminar scholar who was originally quite the Christian if I remember correctly, but he eventually abandoned the faith and became one of the most prolific writers on atheism today. Just to give you a quick flavor of where Price is coming from, take a look at the book he co-authored with Jeffery Jay Lowder called The Empty Tomb: Jesus Beyond the Grave, and we see how the “a priori” comes into play in an attempt to establish the historical reliability of the story of the resurrection of Jesus Christ as opposed to it just being a legend:

It seems to me that there are good reasons to reject Craig’s a priori assumptions about what an empty tomb story would have included if it were legendary. (624/1182, bold emphasis mine)

What struck me was how Price begins this essay–the one my opening quotation is from–by pointing out that Christian apologetics is based on a completely deductive a priori approach, i.e., the Austrian school of economics’s “home turf.”

Now Price’s essay is about, in part, defending the Biblical Form Critics from the attacks leveled against them by the completely deductive a priori Christian apologists. Look at the warm and fuzzy relationship that exists between these two groups when Price writes that

they [i.e., the Christian apologists Boyd and Eddy] sneer at the form-critical axiom that particular forms in which the sayings or stories meet us in any way reflect the Sitz-im-Leben [i.e., the life situation of the church at the time of the creation of these stories] of their use. (Jesus: Myth and Method, 284, bold emphasis mine)

So my educated guess at the moment is this: maybe Biblical “Form Criticism” could be used as another way to dissect and to critique the deductive a priori Austrians.

So what is “form” criticism? Well, if we go to Robert M Price’s book, The Christ-Myth Theory and Its Problems, we see that it boils down to this: what is useful to a community (i.e., the early Christian church community), is what gets passed down to future generations:

I referred to the central axiom of form criticism: that nothing would have been passed down in the tradition unless it was useful to prove some point, to provide some precedent….all pericopae [i.e., contained units or sayings] of the Jesus tradition owe their survival to the fact that they were useful. (20/428, bold emphasis mine)

Price then gives us the “practical implication” of all of this, namely this: the Church sticks words into the mouth of Jesus in order to give them authority. I will cite Price on this, then I want to compare this to one of the reviews of the Rothbard approach to writing the history of economic thought. They do sound very similar to me. But first, Price:

The closer a Jesus-saying seems to match the practice or teaching of the early Church, the greater likelihood that it stems from the latter and has been placed fictively into the speech or life of Jesus merely to secure its authority. (20/428, bold emphasis mine)

Now let’s turn to the essay I was reading yesterday, which inspired me to write in my notes the following: the reviewer is accusing Rothbard of putting words into the mouth of historical characters such as Cantillon, or the French laissez-faire economists, or Say, etc. It is that expression “putting words into the mouth of historical characters” that got me seriously thinking about this link between Biblical Form Criticism and the Rothbardian approach to writing the history of economic thought.  In Tony Endres’s article in the History of Economics Review, we see the reviewer complaining again and again about how Rothbard is transforming historical characters into things that they were not.  Just as the later Christian church is “sticking words into the mouth” of the earlier Jesus, so too the later Murray Rothbard is “sticking words into the mouth” of the earlier historical characters. That is how I would interpret Endres’s review of Rothbard’s works on the history of economic thought.

For example, Endres writes, how Aristotle becomes an Austrian School economist: “Aristotle’s fragmentary remarks on money are exemplary because they are viewed as ‘predating parts of the economics of the Austrian school.'” Cantillon becomes a defender of the Austrian Business Cycle Theory: “Cantillon ‘provides the first hints of the later Austrian theory of the business cycle’ simply because he understood that ‘expanding credit lower[s] the rate of interest.'” Say turns into earlier version of Mises! This reminds me of how the Joseph of the Old Testament gets transformed into the Joseph (Jesus) of the New Testament. It is a common observation in critical studies of the Bible, namely, older traditions get reworked into later traditions. Another example is how the story of Daniel in the Old Testament gets rewritten into the tomb story in the New Testament (see Richard C Carrier, Proving History: Bayes’s Theorem and the Quest for the Historical Jesus, 199-204, “But even using those criteria alone it’s sufficiently strong to be clear…that Matthew made all this up to equate the tomb of Jesus with Daniel’s den of lions”). As Endres tells us “Say becomes, in Rothbard’s hands, a ‘praxeologist.'”

What it all seems to boil down to is this: our “Old Testament” characters in economic history are all foreshadowing our “New Testament” character of the “marginalist revolution” that ushered in the Austrian School of Economics later in history. And we can see that Endres seems to be thinking that Rothbard is “sticking words into the mouths” of historical characters when he sums up by saying:

As Skinner argues “the only plausible answer is of course fatal to the claim [made by Rothbard] itself; that the author [J. B. Say in this case] did not (or even could not) have meant after all to enunciate such a doctrine.”

Let me mention a few other things quickly, that suggest that this “Biblical Form Critical” approach might be very useful in dissecting the Austrian School of Economics. Notice how Price emphasized that what is useful for the Church is what gets passed down to later followers of Christianity (aka what we get to read about in the New Testament). If it is useful it gets passed down; if it is not useful it gets discarded.  Maybe this will explain some of the “bombshell” observations–i.e., shocking observations–made by the blogger Lord Keynes.  For example, Lord Keynes has a blog entitled Friedrich von Wieser and Eugen von Philippovich von Philippsberg: Austrian Economists and Fabian Socialists and we get this shocker:

And now for what might be a bombshell for some people. Two of the first generation of Austrian economists were clearly supporters of Fabian socialism. Yes, you heard me right: they were advocates of early 20th century Fabian socialism.

Or take a quick look at Lord Keynes’s blog, Rescuing Menger from the Austrians, where we find this rather shocking statement from Lord Keynes:

That book shows that the founder of Austrian economics was worlds apart from the modern cult of anarcho-capitalism.

Why does Lord Keynes say this:

All in all, the founder of Austrian economics appears to have accepted the existence of the state and a number of interventions, perhaps on utilitarian grounds.

One rarely hears from modern anarcho-capitalists the fact that Mises thought that natural law theory would lead to tyranny. In Mises’s Economics as a Bridge for Interhuman Understanding we see Mises dismissing natural law, yet I am told by some that Mises is an anarcho-capitalist (hence Mises is “safely” in the Rothbard natural law camp):

The doctrine of natural rights can be traced back to ancient and medieval philosophy. It was easy to coin this natural rights doctrine into popular catchwords which appealed to the masses [maybe “non-aggression principle”]. It supplied the revolutionaries with fanatical fervor. But its illusiveness again and again frustrated the initial success of the reforms inaugurated, and resulted in terrorism and tyranny. (Ludwig von Mises, Economic Freedom and Interventionism: An Anthology of Articles and Essays,258, bold emphasis mine)

So I am thinking, following this Biblical Form Critical approach, that to understand the Austrian school, we have to study how ideas get “passed on” from one generation to the next. What gets passed on. What gets dropped.

And finally, the form critical idea of Sitz-im-Leben or life situation might be relevant for understanding the Austrian school literature. If we look at the Handbook of Biblical Criticism, 2nd edition, by Richard N Soulen we see that Sitz-im-Leben means:

setting in life, or life situation…in Form Criticism to refer to that sociological setting within the life of Israel or the early Church in which particular rhetorical forms (legends, sayings, liturgical formulae, psalms, prophecies, parables, etc.) first took shape. (178)

In other words, maybe the Austrian school’s “praxeology” is not so much their “methodology” of science but rather, maybe praxeology is their “rhetorical form” that emerged in a particular Sitz-im-Leben in the past. Praxeology, this “literary form” then gets passed down because of its usefulness in beating off uncomfortable empirical evidence, such as administered prices. What might this particular Sitz-im-Leben be?

I am thinking that one of the comments on Lord Keynes’s blog might be the answer to the question I just asked, what might have been the Sitz-im-Leben behind the “literary form” of “praxeology”? The article is called Barrotta’s Kantian Critique of Mises’s Epistemology, and the comment in particular is by Georg Thomas:

I suspect, Mises was traumatised by the terrible attacks levelled against the Austrian school by the hugely preponderant German Historical School. The latter denied the possibility of a general science of economics, and so Mises developed an exaggerated rationalist ambition to provide an unshakable epistemological foundation for economics, and ended up with his highly questionable praxeology – which really is rather an unsavoury attempt at cornering absolute truth. This attitude attracted truly dogmatic minds, especially that of Rothbard who transplanted Mises rationalistic ambition into his hubristic system building efforts in the area of ethics and political theory.

In other words, the life situation or Sitz-im-Leben for the creation of a “literary form” of “praxeology” might have been the “terrible attacks levelled against the Austrian school by the hugely preponderant German Historical School.”

Please understand that this essay is a collection of inchoate thoughts by me. So I am still developing my ideas in this area. That is why this essay is a bit disjointed and the arguments are not fully developed. That is because I am still developing them in my own mind. But I wanted to write it down and share it with some of you!